Boston Trombley Company Is a Defendant in a Lawsuit Alleging

question 98

Multiple Choice

Boston Trombley Company is a defendant in a lawsuit alleging damages of $3 billion.The litigation is anticipated to continue for several years,but no reasonable estimate can be made at this time regarding ultimate financial responsibility.This situation is an example of a(n)

• A)$3 billion expense to be recorded in the income statement during the year of the suit.
• B)loss contingency that should be disclosed in the notes to Boston's financial statements.
• C)estimated liability that must appear in Boston Trombley Company's balance sheet.
• D)None of these are correct.

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Definitions:

Asch's Conformity Studies

A series of experiments that demonstrated the power of conformity in groups, highlighting how individuals often conform to an incorrect majority opinion.

Idiosyncrasy Credits

The concept that an individual can deviate from group norms or expectations to a certain extent without facing sanctions if they have previously accumulated enough goodwill or credibility within the group.

Deviant

Behavior or actions that deviate significantly from societal norms or expectations, often viewed negatively.

Leader

An individual who guides or influences a group towards achieving collectively defined goals.